Keeping up with the MiFID IIs, the REMITs, the EMIRs, and all the usual suspects | Part 1/3

November 24, 2017

 

An interview with Aviv Handler, Managing Director of ETR Advisory

Read part 2 here »
Read part 3 here »


1) In regards to Brexit and energy regulations, it seems that discussions have not given much hint about future changes. Is it too early to start preparing?

 

In theory, this is a good time to start preparing; there are 17 months to go until Brexit as we know at the moment. We know, for the time being, that Brexit is going to happen, so 17 months is a good time to start making preparations. Unfortunately, though, we don’t have any details at all yet on what a Brexit looks like, at least on a general, political level. However, on the day of Brexit, there could be potentially a very real impact to what we do in terms of regulations. For example, at the moment we report trades under REMIT and EMIR; the day after Brexit, trades made in the UK, are not necessarily subject to these rules, and, even if they are, there are very practical questions as to where we should report that trade to, to an EMIR trade repository or not? (because it’s not an EU trade). Will there be another trade repository? At the moment, we don’t even know the right questions, and with only 7 months to go that’s potentially quite problematic. There are certain discussions taking place which allow you to think about some things, but these discussions exist more on a general level, rather than a specific level. For trade reporting, in this case, there isn’t anything to discuss yet.

“When it comes to Brexit and trade reporting, there isn’t anything to discuss yet.”

2) Only 33% of firms are ready for MiFID II and GDPR; why do you think that’s the case?

 

There are two months left until MiFID II, and I would imagine that in the banking market the number is higher than 33%. There might be parts of MiFID II that people may not ready for. Only a few feel that they are on track to be ready by January 3rd, it depends on which bits of MiFID II you look at.

 

The GDPR comes in the middle of 2018. The GDPR is seen as a general rule, IT-type regulation which applies to every industry, but when it comes to implementing our rules, like MiFID II and REMIT, there’s a certain overlap and it’s possible to successfully comply with one while breaking the other. So basically REMIT and MiFID II for investment firms require the handling of personal data generally relating to traders. So there are rules around reporting who the trader was ( = the person who made the decision to execute the deal), and there are rules around retaining that data as well. GDPR restricts what you can do with that data, and there are rules around not retaining that data; so there are some competing objectives that one needs to think through when implementing those rules.

 

Read part 2 here »
Read part 3 here »

 

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